G’day, Mates!
It’s Engelo Rumora, your favorite Australian, today sharing my opinion on the key traits that any genuine turnkey real estate company should possess.
As I’m sure you’re aware, turnkey investors have a quite a stench about them. And by that, I mean there is a well-known stigma about turnkey operators.
Many of them have developed a reputation for selling way overpriced properties, promising numbers on paper that will never be delivered and doing anything and everything just to get you to invest in their property. Then, after the sale, they leave you high and dry with no assistance and sometimes even no communication!
With that being said, there are good, genuine turnkey companies out there, doing the right thing and offering honest investments to their investors. Here are three traits that, in my opinion, any genuine turnkey real estate operator should have:
No. 1 — Immediate communication
After moving to the States, I still had a couple of investment properties in Australia. Prompt communication was of major importance to me, as I was no longer at an arm’s length away from the people on the ground looking after my properties.
Yes, I was now in a whole different time zone, but the members of my team were always very quick to reply to any inquiry I ever had. As I see it, the only thing connecting most out-of-state/out-of-country turnkey investors to their investments is the teams they have in place on the ground.
Before you establish a relationship with any turnkey company, make sure that organization will consistently quickly reply to your emails or calls. The longest you should ever wait for a reply is 48 hours. Any excuses such as being “extremely busy” and what-not should be a BIG red flag.
No. 2 — In-house property management
This is pretty much a no-brainer, in my opinion.
I don’t know many well-known and reputable turnkey companies in the country that are successful without having in-house property management. Regarding the question of whether in-house or outsourced property management is best, I believe outsourced property management is never going to work as hard as an in-house property manager to deliver the numbers promised on paper.
Outsourced property management is only sustainable if the company can profit on the investment properties that they manage — meaning they probably will add extra fees on anything and everything that is maintenance-related.
In-house property management means that the turnkey company has established management within its organization solely for the benefit of its investors. The incentive is to deliver the numbers that the company promised, so that in return, investors will buy more properties as well as spread the word and refer others to join them in investing with the company.
No. 3 — No ‘Boiler-Room’ operations
Definition: High-pressure sales tactics.
Example: “This is a once-in-a-lifetime opportunity to purchase these amazing discounted properties. Rumor is, the market will boom tomorrow, and if you don’t take advantage of this opportunity TODAY, you will miss out.”
What a joke. Don’t fall for these tactics.
This pitch is usually used by operators who are only interested in making a quick buck. If they aren’t willing to spend time assisting and developing a relationship with you, then you should keep looking.
I like to say that entering into a turnkey investment is much like entering a marriage, and if you don’t want to spend time getting to know each other — then it probably will only end up being an awfully bad one-night stand!
As you can probably see, I believe these three traits all come down to trust and building relationships.
Everything I am sharing with you today is based on the assumption that time has been spent on establishing trust and a relationship with the key people “on the ground” behind the operation.
These people should have your best interest at heart and be willing to hold your hand throughout the lifetime of your investment.
I believe 100% that building this trust and relationship will be the key to your success in real estate investing.
Visit Engelo’s site here.
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